Joe Adwon LLC v. Cotti Foods Midwest, Inc.

IN THE DISTRICT COURT IN AND FOR TULSA COUNTY, STATE OF OKLAHOMA JOE ADWON LLC, an Oklahoma Limited Liability Company ) ) ) Plaintiff, vs. ) ) COTTI FOODS MIDWEST, INC., a California Corporation ) ) ) Defendant. PETITION Plaintiff Joe Adwon LLC ("Adwon"), for its claims against the Defendant Cotti Foods Midwest, Inc. ("Cotti" or "Defendant"), alleges and states as follows: PARTIES, JURISDICTION AND VENUE 1. Adwon is a limited liability company formed in accordance with the laws of Oklahoma and which has its principal place of business in Tulsa County, Oklahoma. 2. Defendant is incorporated in California and maintains its principal place of business in California. 3. This Court has general jurisdiction of the claims pleaded herein under the Oklahoma Constitution. 4. This Court has personal jurisdiction over Cotti in accordance with 12 O.S. § 2004(F) by reason of the fact that Cotti conducts or has conducted business in Oklahoma at all relevant times and the fact that the claims set forth herein arise out of Cotti's activities in Oklahoma. 5. Venue is proper in this county under 18 O.S. § 471 and 12 O.S. §§ 143 and 187. STATEMENT OF PERTINENT FACTS 6. Adwon and Cotti, by mesne assignments or conveyances, are parties to that certain Lease executed on or about June 23, 1975 ("the Lease") and continued in effect by written agreements or amendments entered into between the original parties to the Lease or their respective successors. The Lease, as amended, terminated on December 31, 2024 and Cotti surrendered the leased premises ("the Premises") to Adwon on or about that date. A true and correct copy of the Lease, as originally executed, is attached hereto and made a part hereof as Exhibit "A." Cotti is a franchisee of Wendy's International, Inc. ("Wendy's") – the original lessee under the Lease – or of a successor entity of Wendy's. 7. Among other pertinent provisions, the Lease provides as follows: That [Lessee] will keep the demised premises and the improvements placed thereon in a good state of repair, and it will be responsible for all repairs, including painting of the interior and exterior of the building, maintaining the roof of the building, all windows, doors and openings, all electrical heating, plumbing, air conditioning and other systems installed within the building, paved parking area, shrubbery, planting, flood lights, and all other accessories, appurtenances and related equipment. [Paragraph 6(B) of the Lease] * * * That, at the expiration of said term or any extension or renewal thereof, [Lessee] will quit and surrender the demised premises in a good and substantial state of repair, reasonable wear and tear and damage by fire or the elements, or from other causes beyond its control, excepted. [Paragraph 6(D) of the Lease] * * * That Lessee will comply with all lawful requirements of the Board of Health, Police Department, Fire Department, Municipal, State and Federal authorities respecting the manner in which it uses the leased premises. [Paragraph 6(E) of the Lease] 8. Cotti has breached the Lease, including each of the quoted provisions, in multiple respects, as detailed in the balance of this pleading. Indeed, Cotti’s failure to maintain the Premises properly during its possession thereof resulted in the issuance by the City of Tulsa (Code Enforcement) of its “Notice of Violation – Nuisance” finding the Premises “uninhabitable for Human Occupancy.” Such notice is dated May 13, 2024, shortly after the break-in described in Paragraph 10 infra. Cotti took no action whatsoever between that date and the surrender date identified hereinbefore, leaving the Premises on such date in anything but “a good state of repair.” 9. Cotti and its predecessors in title under the Lease operated a Wendy’s restaurant on the Premises, located at 7221 East Admiral Place, until January 16, 2024. At that time, Cotti closed the business. Cotti did not adequately secure (i) the building located on the Premises (“the Building”) or (ii) the other property adjacent to the building, including without limitation the restaurant parking lot and signage located on the property. As a direct result of such neglect, security problems ensued shortly after the restaurant closure, including (but not limited to) those recounted in this Petition. Adwon consistently kept regional and local representatives and agents of Cotti informed of the multiple and various security and property maintenance problems that were transpiring on the Premises. 10. Sometime prior to May 8, 2024, criminal intruders broke into the (inadequately secured) Premises. The intruders (i) vandalized the Premises and (ii) stole various items of equipment or components of equipment and other personal property or fixtures from the Premises. Adwon discovered the break-in and immediately informed both Cotti representatives and the Tulsa Police of the incident. Cotti was the lessee of the Premises and had the exclusive right of control of the same under the Lease and as a matter of black-letter law. Inspection of the Premises reveals that another theft from the Premises occurred on or about May 12, 2024. Nevertheless Cotti refused and continues to refuse to take any responsibility for the monetary or physical damage to the Premises inflicted during its tenure as the sole lessee and sole control-party in respect of the Premises. Indeed in communications among the parties and their respective counsel, Cotti has maintained, utterly falsely, that the damage inflicted in May 2024 occurred more than a month later – allegedly on June 19, 2024 – and that the damage to the Premises was somehow *Adwon's* fault. 11. The decision to close the Wendy’s restaurant business located on the Premises was Cotti’s and Cotti’s alone. As alleged herein – and is made explicit by the terms of the Lease quoted verbatim in Paragraph 7 hereinabove – the responsibility for keeping the Premises in a “good state of repair” between the date of the closing of the business and the end of the Lease term (“the Post-Closing Period”) was Cotti’s alone. The same is true, of course, with respect to the *entire term* of the Lease, as amended. Indeed, during the term of the Lease, Adwon could not enter the Building without Cotti’s express or implied consent and Adwon, repeatedly, was forced to track down Cotti employees or agents to unlock the Building so that Adwon could inspect the same for physical damage. 12. As is detailed more fully hereinbelow, Cotti utterly failed to discharge its clear contractual responsibilities during the Post-Closing Period. Indeed, as Adwon informed Cotti on January 3, 2024 (after being informed of Cotti’s plans to close the Wendy’s restaurant situated on the Premises) and at earlier times, “the Store has not been kept up to your standards.” More particularly, Cotti failed to secure the Building or any of the Premises in any fashion whatsoever during the Post-Closing Period or to take protective measures that would have prevented or greatly ameliorated the damages. More particularly, but without limitation of the foregoing, Cotti failed to take measures that would have ameliorated the appearance of the premises as an attractive nuisance, despite Cotti’s promises to do so. 13. Certain of the maintenance and repair failures that occurred during the term of the Lease, and for which Cotti alone is contractually responsible, include, but are not limited to, the following. (A) There are three (3) ten-ton air conditioning/heating ("HVAC") units on the roof of the Building. Persons unknown to Adwon gutted the units. The damage to the equipment cannot be repaired or remediated except by installation of replacement unit(s). (B) A freestanding transformer unit that serves the Building is in place on the Premises. Vandals stripped the wiring from the unit. Such wiring must be replaced in the transformer unit and throughout the interior of the Building. In addition, missing equipment needed to make the entire electrical system in the Building, and throughout the Premises, functional, must be installed. (C) Vandals also damaged the plenum situated above the Building's drop ceiling. (The plenum is the dedicated open space used for air circulation in the Building's HVAC system and is essential to fire safety within the Building). The plenum must be repaired or serviced to make the same functional. (D) Multiple windows in the Building have been broken and must be replaced. (E) The break-in at the Building and/or other vandalism and non-maintenance resulted in irremediable water damage to the carpet in the Building. Replacement of the carpet, along with related work, must be undertaken. (F) The Premises include external, electrically-lighted pole mounted signage. The reader board was removed from the signage before the expiration date of the Lease and before the Premises were surrender to Adwon. The pole-mounted signage was not maintained by Cotti. It is now in a state of disrepair and must be completely refurbished, including installation of new light tubes. Adwon will be required to procure light tubes for storage and/or to replace the light tubes before reletting the Premises. (G) The fascia signage on the building is missing and there are no functioning light tubes, which tubes are needed to back-light the fascia signage. Adwon will now have to purchase sign tubes for storage and/or replace the fascia signage and sign tubes before reletting the Premises. (H) Condensers in refrigeration units and wiring to the walk-in freezer in the Building were damaged and must be repaired. (I) The Building’s exterior structural design includes a parapet extending above the roofline. The parapet, and the design pieces attached thereto and extending above the top of the parapet, identify a building distinctively as a Wendy’s restaurant. These design features need to be removed so as to (among other things) eliminate any association in the minds of passerby consumers that the Building – in the state of abject disrepair in which Cotti has left the Building and Premises – was a functioning Wendy’s location. (J) The bathroom in the Building has suffered extensive irreparable damages to all of the fixtures, which fixtures must be replaced. CLAIM FOR RELIEF 14. Cotti’s actions and failures to act, as described and partially detailed herein, constitute breaches of the Lease, to Adwon’s damage in an amount no less than $713,514.00. Adwon is entitled to recover all such amounts. PRAYER FOR RELIEF WHEREFORE, Adwon prays for relief as follows: (A) for compensatory damages for breach of contract in the amount of $$713,514.00; (B) for the costs of this action and such attorneys’ fees as may be allowed by law; and (C) for such other and further relief as this Court may deem just and proper. WALLER JORGENSEN, PLLC By J. David Jorgenson, OBA #4839 Mark A. Waller, OBA # 14831 401 South Boston Avenue, Suite 500 Tulsa, Oklahoma 74103 918.933.4288 [email protected] [email protected] Attorneys for Plaintiff Joe Adwon LLC LEASE THIS LEASE AGREEMENT, made and entered into at Columbus, County of Franklin, State of Ohio, by and between CLAUDE H. ROGERS and MITCH ADWON, hereinafter referred to as "LESSOR", whose address is 2626 East 21st Street, Tulsa, Oklahoma 74114, and WENDY'S INTERNATIONAL, INC., an Ohio corporation, hereinafter referred to as "LESSEE", whose address is 2066 West Henderson Road, Columbus, Ohio 43220. The terms "LESSOR" and "LESSEE" being intended to include the successors and assigns of the original parties and the heirs, legal representatives, successors and assigns of the respective persons who from time to time are Lessor and Lessee, wherever the context of this Lease so requires or admits. WITNESSETH: 1. DEMISE OF PREMISES: That the LESSOR, for and in consideration of the rents herein reserved to be paid to the LESSEE, and for and in consideration of the covenants to be kept and performed by the LESSEE, does hereby lease, let and demise unto the LESSEE, the following described premises: Situated in the City of Tulsa, County of Tulsa, State of Oklahoma, commonly known as 7221 East Admiral Place, and legally described as follows: Lots 1, 2, and 3 of Wiggins Re-subdivision of the East 1/2 of Lot 1 of Polston Subdivision, an addition to the City of Tulsa in Tulsa County, Oklahoma, according to the recorded plat thereof, less and except a tract described as beginning at the NW corner of said Lot 3, thence south along the west line of said Lot 3, a distance of 10.53 feet, thence South 7° 25' 34" East a distance of 136.70 feet, thence South 1° 12' 32" East a distance of 194.37 feet, to a point on the south line of said Lot 1, thence East along said south line a distance of 25 feet to the SE corner of said Lot 1, thence north along the East line of said Lots 1, 2, and 3, a distance of 243.8 feet to the NE corner of said Lot 3, thence West along the north line of said Lot 3, a distance of 159.4 feet to a point of beginning, City of Tulsa, County of Tulsa, Oklahoma. A) The above-described premises includes all buildings, structures and other improvements constructed and to be constructed thereon, and all easements, rights and appurtenances thereto. B) A survey of the subject property is attached hereto, marked Exhibit "A", signed by the parties, and made a part of this Lease. 2. DURATION OF TERM: A) Primary Term: The primary term and duration of this Lease shall be for a period of twenty (20) years, commencing with the commencement date herein provided and continuing from said commencement date to the end of the primary term. B) Secondary Term: (Option to Renew) Upon the expiration of the primary term of this lease, the LESSEE shall have two (2) successive options to renew for five (5) years duration for each option, providing that it shall give the LESSOR notice in writing at lease one hundred eighty (180) days prior to the expiration of the primary term of this Lease that it intends to renew the same, and likewise one hundred eighty (180) days notice prior to the expiration of the first five (5) year extended term that it intends to renew same. The extended terms hereunder shall be subject to all of the terms and conditions of the within Lease. The rental for the extended terms hercof shall be the same as the primary term, payable monthly in advance in monthly installments. 3. COMMENCEMENT DATE: The commencement date shall be that date which is the first day following completion of the construction work required to be performed under this Lease. 4. AMOUNT OF RENT AND MANNER OF PAYMENT: A) Rent for the first year through the tenth year of the Primary Term shall be equal to an annual rental of Eighteen Thousand Dollars ($18,000.00), which sum shall be payable in equal monthly installments of One Thousand Five Hundred Dollars ($1,500.00); the rent for the eleventh through the twentieth year of the Primary Term, and the rent for each year of the Secondary Term, or Terms, shall be equal to an annual rental of Nineteen Thousand Eight Hundred Dollars ($19,800.00), which sum shall be payable in equal monthly installments of One Thousand Six Hundred Fifty Dollars ($1,650.00); provided, however, that said annual rent payable for said Secondary Term, or Terms, shall be adjusted up or down by the exact amount of increase or decrease required to be paid by LESSOR under the terms and provisions of Article II, paragraph (b) of the Lease by and between LESSOR and John Boman, Executor of the Estate of Henry C. Boman. All of said installments being payable monthly in advance, at LESSOR'S address, set forth above, commencing on the Commencement Date, and payable monthly thereafter on the first day of each and every calendar month during the term of this Lease and any extension thereof. In the event that the term commences other than on the first day of the month, rent for the first and last months of the term shall be prorated. (1) Additional Rent. Within ninety (90) days following the end of each Lease Year, LESSEE shall submit to LESSOR a certified statement of the total amount of LESSEE'S gross sales from its business conducted on the demised premises for said year. During the first year through the tenth year of the Primary Term, if said gross sales exceeds the sum of Three Hundred Sixty Thousand ($360,000.00) for said year, LESSEE shall forthwith pay to LESSOR a sum equal to five percent (5%) of the gross sales in excess of Three Hundred Sixty Thousand Dollars ($360,000.00) from the demised premises for said year as and for additional or percentage rental. During the eleventh through the twentieth year of the Primary Term, and during the Secondary Term or Terms, if said gross sales exceed the sum of Three Hundred Ninety-Six Thousand Dollars ($396,000.00) for said year, LESSEE shall forthwith pay the LESSOR a sum equal to five percent (5%) of the gross sales in excess of Three Hundred Ninety-Six Thousand Dollars ($396,000.00) from the demised premises for said year as and for additional or percentage rental. During any year of the Secondary Term, or Terms, said Three Hundred Ninety-Six Thousand Dollar ($396,000.00) sales figure shall be adjusted to reflect any increases or decreases in the annual rent set forth in paragraph 4(A) above. In the event said gross sales do not exceed the sums as set forth above for any one said year, then no additional or percentage rental shall be payable to LESSOR for said Lease Year. In addition thereto, LESSEE shall provide LESSOR with monthly statements of its gross sales. At LESSOR'S option, it may substitute a calendar year for the term "Lease Year" as used herein, in which case, percentage rental due for any fractional years involved shall be adjusted by the parties in accordance with the tenor hereof. "Gross sales", as used herein, shall mean the amount or sales of all merchandise sold in, on, about or from the demised premises by LESSEE or any subtenants, or licensees, whether for cash or on a charge, credit or time basis, without reserve, or deduction for inability or failure to collect, including but not limited to such sales and services (1) where orders originate and/or are accepted by LESSEE in demised premises but delivery or performance thereof is made from or at any place other than demised premises or (2) pursuant to telephone or other similar orders received or filled at or in demised premises. There shall be deductible from gross sales: (1) amount of refunds, allowances or discounts to customers, provided they have been included in gross sales; (2) exchange of merchandise between stores of LESSEE where such exchanges are made solely for the operation of LESSEE'S business and not for the purpose of consummating a sale which has been made at, in, on or from the demised premises and/or for the purpose of depriving LESSOR of the benefit of such sale which otherwise would have been made at, in, or from the demised premises; (3) returns to shippers and manufacturers for credit; (4) sales of trade fixtures or store operating equipment after use thereof in the conduct of LESSEE'S business in the demised premises; (5) all sums and credits received in settlement of claims for loss or damage to merchandise; (6) all sales from vending machines and by way of example but not by way of limitation, cigarette machines and pay telephones; and (7) amount of any excise or sales tax levied upon retail sales and payable over to the appropriate governmental authority. B) In addition to the payments required herein as rent to the LESSOR, LESSEE shall also pay the following: (1) All occupational licenses, including state, county, municipal and/or hotel and restaurant commission licenses, and other licenses necessary in the operation of the business to be carried on in the demised premises. (2) All utility services provided to the premises, including, but not limited to, water, gas, electric, and telephone, as they from time to time shall accrue and be due and payable during the term of this Lease according to separate meters therefor. (3) LESSEE shall pay to the appropriate governmental agencies ad valorem taxes and special assessments with respect to the demised premises and the improvements thereon during the term of this Lease or any extension thereof. It is further understood and agreed that all ad valorem taxes assessed during the first and last years of the term of this Lease shall be prorated and that LESSEE shall only be liable for such portions of such taxes assessed for said first and last years as its months of occupancy during any of said years shall bear to the total of twelve (12) months. In the event of the imposition of any special assessment or assessments which may be paid in annual installments, at LESSEE'S option exercisable by written notice to LESSOR, LESSOR shall advise the appropriate governmental agency of its intention to elect payment in annual installments and LESSEE shall be liable for only such annual installments as shall be due and payable during the term of this Lease, or if the option to extend shall be exercised, the extended term hereof. Should LESSEE fail to pay any tax or special assessment when due and payable, LESSOR may, if LESSOR so desires, pay the same and the amount together with any penalties which LESSOR may have paid, shall immediately become due and payable to LESSOR as additional rent. LESSEE shall have the right in its name or in LESSOR'S name, whichever shall be appropriate, but at its own cost and expense, to file and prosecute applications for reduction of assessed valuation and to institute legal proceedings for the reduction thereof. In no event shall LESSEE be liable for payment of any income, estate or inheritance taxes imposed upon the LESSOR or the estate of the LESSOR with respect to the demised premises. C) LESSEE shall not pay any income, franchise, or excise tax levied upon or assessed against the LESSOR. 5. CONSTRUCTION OF BUILDING: A) Building and Improvements. The LESSOR agrees to construct a restaurant building and appurtenances including, but not limited to, the restaurant building, driveways and parking areas in accordance with the details shown on the attached plot plan, marked Exhibit "B" and the plans and specifications attached, marked Exhibit "C", or equal approved alternatives with approved change orders approved by both the LESSOR and LESSEE, in writing. LESSOR agrees to obtain the necessary building permits referred to in paragraph (B) below within forty-five (45) days from the last execution of this Lease and to complete construction within one hundred thirty-five (135) days after obtaining said building permits. B) Contingencies. This Lease is conditioned upon the LESSOR obtaining at its own cost and expense, initial permits and licenses necessary for the erection and opening of a Wendy's Old Fashioned Hamburgers restaurant in accordance with the plans, specifications, approved change orders and plot plans submitted to and approved by the LESSOR. In the event that all necessary permits and licenses for the erection of said building are not obtainable or available from the appropriate governmental authorities, then this Lease shall be null and void and have no effect and shall terminate immediately upon receipt by the LESSOR of the notice of the final governmental authority of the denial of the issuance of such permits. 6. COVENANTS OF THE LESSEE: The LESSEE hereby covenants and agrees with LESSOR as follows: A) That it will pay the rent as herein specified without notice. B) That it will keep the demised premises and the improvements placed thereon in a good state of repair, and it will be responsible for all repairs, including painting of the interior and exterior of the building, maintaining the roof of the building, all windows, doors and openings, all electrical heating, plumbing, air conditioning and other systems installed within the building, paved parking area, shrubbery, planting, flood lights, and all other accessories, appurtenances and related equipment. C) That it will, during the full term of this Lease, and any extensions thereof, and at its own expense, carry: (1) Comprehensive general liability insurance in limits referred to as Three Hundred Thousand Dollars ($300,000) each person, Five Hundred Thousand Dollars ($500,000) each accident, and Fifty Thousand Dollars ($50,000.00) property damage. The policies shall cover accident or damage in or on the demised premises, sidewalk in front thereof, parking area, entrance ways, and all other portions of the building thereon. (2) Fire insurance, with extended coverage, in an amount not less than eighty percent (80%) of the insurable value, naming LESSOR and LESSEE as insured. Such policy may also have a mortgagee clause in favor of any mortgagee of the demised premises to whose mortgage this Lease shall be subordinate as hereinafter provided. Such insurance policy may also contain, at LESSEE'S option, a waiver of subrogation provision. Upon the failure of the LESSEE to furnish any policy of insurance as above set forth, LESSOR may, at its option, obtain the same and the premium therefor shall immediately become due and payable as additional rent. D) That, at the expiration of said term or any extension or renewal thereof, it will quit and surrender the demised premises in a good and substantial state of repair, reasonable wear and tear and damage by fire or the elements, or from other causes beyond its control, excepted. E) That it will comply with all lawful requirements of the Board of Health, Police Department, Fire Department, Municipal, State and Federal authorities respecting the manner in which it uses the leased premises. 7. COVENANTS OF THE LESSOR: A) The LESSOR hereby warrants, represents and covenants to the LESSEE as follows: (1) Title. That LESSOR, at the time of the execution of these presents, has title and possession of the property by virtue of a lease with John Bowman, Executor of the Estate of Henry C. Bowman, and that it has good and marketable title and the full right to lease the same for the term aforesaid, does warrant and will defend the title thereto, and will indemnify LESSEE against any damage and expense which LESSEE may suffer by reason of any lien, encumbrances, restriction or defect in the title or description herein of the premises. It is expressly understood and agreed that the above-captioned covenant and warranty of the LESSOR constitutes LESSOR'S warranty that in case LESSOR does not have the title and rights aforesaid, then in such event, this Lease shall, at the option of the LESSEE, become null and void, and no rent for the remainder of the term aforesaid shall become due to the LESSOR, its legal representatives or assigns, and all advance rents and other payments shall be returned by the LESSOR to the LESSEE, or LESSEE may withhold rent thereafter accruing until LESSEE is furnished proof satisfactory to it as the party entitled thereto. (2) Quiet Enjoyment. That, upon LESSEE paying the rent and observing and performing all of the terms, covenants and conditions on LESSEE'S part to be observed and performed, LESSEE may peaceably and quietly have, hold, occupy and enjoy the demised premises and all the appurtenances thereto without hindrances or molestation; provided, however, that LESSOR and LESSOR'S agents may examine the leased premises at any reasonable time. (3) Utility Lines. That water lines, sewer lines, electrical lines, gas lines, and telephone lines are installed and are available at the property line herein described for connection to the facilities constructed or to be constructed on the subject property. (4) Lessee's Signs. That LESSEE shall have the right to install and maintain its standard signs advertising LESSEE'S business, as revised from time to time. (5) Restrictions. That there are no restrictions, easements, or conditions of record, zoning or use, which would prevent the LESSEE from erecting LESSEE'S standard building and signs according to the plans and specifications as referred to herein. (6) Access. That LESSEE has access to all street fronts and adjoining rights-of-way. If any street, adjoining right-of-way, or all or any part of the parking area is obstructed or blocked for repairs, reconstruction or otherwise, to the extent the operation of LESSEE'S business is substantially adversely affected, a proportionate reduction of rent shall be made. If customer access to LESSEE'S store is blocked, rent shall abate; provided, however, rent shall not abate if access is blocked due to acts of LESSEE. LESSOR shall, at its own cost and expense, provide all access roads and driveways, fully paved, to the property lines of the demised premises. (7) Encumbrances. That the demised premises are free and clear of any and all encumbrances excepting real estate taxes for the current tax year. (8) Payments. That, in the event the LESSOR shall fail to make the payments on any mortgages, or taxes or other payments on the demised premises which LESSOR is required to pay, the LESSEE may, but shall not be required to, make such mortgage or tax payments or such other payments or do such acts and things as may be necessary to keep the mortgages or taxes on the premises from being in default, and may deduct the expense and cost thereof from the next ensuing rentals due under this Lease, together with interest thereon at nine percent (9%) per annum. (9) Liens. That LESSOR will keep said premises free and clear of any and all mechanics' and/or materialmen's liens on account of any construction, repair, alteration or improvements which LESSOR may be obligated to make or perform under this Lease. LESSEE shall be permitted to install personal property such as trade fixtures and equipment and place liens thereon and LESSOR agrees to execute such WAIVERS OF LIEN as may be required by vendor or financing institutions. Any liens permitted shall be only against personal property and not against the realty or the demised premises. LESSEE may, at the end of the basic term of this Lease, or any extension thereof, remove from the demised premises personal property, such as trade fixtures and equipment, provided they shall leave the interior and exterior of all of the leased premises "broom clean". (10) Zoning and Licensing. The LESSOR represents and warrants that there are presently, and that there will be at the date upon which the demised premises are opened for the conduct of its business, no covenants or restrictions which would prohibit or limit the LESSEE from operating on the demised premises a restaurant and food service business, and that all licenses and permits, including but not limited to those pertaining to building and occupancy, which are necessary to LESSEE'S business, can be obtained. The LESSOR agrees upon request by LESSEE to sign promptly and without charge therefore to the LESSEE, any application for licenses and permits as may be required by the LESSEE for the conduct and operation of the business herein authorized or for the proper use of the demised premises, this to include, without limitation, applications for licenses, signs, alcoholic beverages, and any other licenses where the signature of the LESSOR or owner is required by the applicable laws of the state, county, or municipality in which the demised property is located that are in effect and in force at the time, the cost of any such licenses and permits to be borne by the LESSEE. The LESSEE'S use of the demised premises includes the construction and operation of a retail take-home restaurant business for on-premises and off-premises consumption of food and beverages. Therefore, this Lease is executed specifically contingent upon the immediate availability of all necessary licenses and permits pertaining to the building, occupancy, signs, driveways (including ingress and egress to public thoroughfares) and any other governmental permits required. In the event that all such permits and licenses have not been obtained within the time period set forth in paragraph 5 above, then this Lease shall be at the option of the LESSEE, void and both parties will be relieved from any obligations and/or liabilities hereunder, and all deposits and payments hereunder shall be refunded forthwith to LESSEE. B) LESSOR shall furnish to LESSEE within thirty (30) days from the date hereof the following; provided, however, that LESSEE shall order the following and charge LESSOR for the cost of the same: (1) An opinion of counsel acceptable to the LESSEE, showing good and marketable title to the leased premises to be vested in LESSOR, subject to the terms of the lease between LESSOR and John Boman, Executor of the Estate of Henry C. Boman. (2) A certificate from appropriate authority stating that the premises are properly zoned for the issuance of occupational licenses for a sit-down, interior service or take-out restaurant. (3) A current certified survey bearing a legal description in accord with the description contained above, made and prepared by a reputable and competent licensed surveyor showing: (i) the area, dimension and locations of the property to the nearest monuments, streets and alleys on all sides; (ii) spot elevations and bench marks; (iii) the locations of all available utilities of adjoining streets, alleys or properties with invert elevations of basins, manholes, etc.; (iv) the location of all improvements and encroachments. The survey shall not disclose any condition, in LESSEE'S judgment, which would render the premises unusable by LESSEE for the purpose stated. In the event the LESSOR cannot furnish the LESSEE with the instruments required by sub-paragraphs (1), (2) and (3) above, or if they are not obtainable, then, in such event, this Lease shall, at the option of the LESSEE, be declared null and void and of no further force and effect, and any monies paid by LESSEE, whether for rent or otherwise, shall be forthwith refunded to the LESSEE, and the LESSEE shall be released from any further obligations under the terms of this Lease. 8. MUTUAL COVENANTS: The following stipulations and agreements are expressly understood by both the LESSOR and the LESSEE, and they do hereby agree to abide by them: A) Neither party shall have the right to cancel this Lease for default of the other unless such default shall remain uncured for a period of thirty (30) days after receipt of notice in writing to such other party specifying the nature of the default. B) The covenants and agreements contained in this Lease are inter-dependent and are binding on the parties hereto, their successors and assigns. C) It is mutually understood and agreed that, in the event it shall become necessary for either party to enforce the provisions of this Lease by legal action or employ attorneys for the collection of any monies due hereunder, then the prevailing party shall be entitled to recover its reasonable attorney's fees, court costs, and other costs of such proceedings. D) LESSOR and LESSEE herein agree to make and execute a Declaration of Lease in recordable form, so as to give public notice of the execution of the within Lease, and a statement therein as to the date of commencement of the within Lease, which shall not disclose the terms of rental or additional rental hereunder. E) The LESSOR hereby waives any right to claim any signs, equipment and/or fixtures to the realty as real property, and same may be removed by the LESSEE at any time. The LESSEE may remove the signs, equipment and/or fixtures that may have been affixed to the realty by the LESSEE in the erection of the Wendy's Old Fashioned Hamburgers restaurant, provided that the premises are restored to a useable condition. Anything to the contrary herein notwithstanding, LESSEE shall have the right, as soon as the progress of construction shall reasonably warrant it, to enter upon the premises for the purpose of installing any such fixtures, equipment or other property, provided, however, that any such work performed by LESSEE or its agents or contractors shall be coordinated with the construction work being performed so as not to interfere with or delay the same. F) The LESSEE shall not be obligated to pay any commission or service fees to real estate brokers or other persons for services rendered in negotiating the execution of this Lease, and LESSOR shall hold LESSEE harmless and defend, at LESSOR'S own expense, against any claims for such commissions or fees. G) The location of the building on the demised premises shall be the exclusive right of LESSEE, and subject only to zoning restrictions. 9. ASSIGNMENT AND SUBLLETTING: The LESSEE may assign this Lease or let or underlet the whole or any part of said premises with the written consent of the LESSOR, provided LESSEE remains liable on the within Lease, but LESSEE will not occupy or use said premises or permit the same to be occupied or used, for any business which is unlawful or of competitive nature with other businesses on the premises of which this is a part. 10. CONDEMNATION: The parties hereto agree that, should the whole of the demised premises be taken or condemned by any competent authority for any public or quasi-public use or purpose during the term of this Lease, this Lease shall terminate as of the time when possession thereof is required for public use and from that day on, the parties shall be released from further obligations hereunder. LESSEE reserves unto itself the right to prosecute its claim for an award based upon its leasehold interest for such taking, without impairing any rights of LESSOR for the taking, or injury to the reversions. In the event that a part of the demised premises shall be taken or condemned and that (a) the part so taken includes the building on the demised premises or any part thereof, or (b) the part so taken shall remove from the premises ten percent (10%) or more of the front depth of the parking area thereof or more than a depth of fifteen (15) feet whichever is greater, or (c) the part so taken shall consist of twenty-five percent (25%) or more of the total parking area, (d) such partial taking shall result in cutting off direct access from the demised premises to any adjacent public street or highway, then and in such event, the LESSEE may, at any time either prior to or within a period of sixty (60) days after the date when possession of the premises shall be required by the condemning authority, elect to terminate this Lease, then, in such event, LESSOR shall, with reasonable promptness, make necessary repairs to and alterations of the improvements on the demised premises for the purpose of restoring the same to an economic architectural unit, susceptible to the same use as that which was in effect immediately prior to such taking, to the extent that may have been necessary by such condemnation, subject to a pro-rata reduction in rental. In the event that the means of ingress and egress as shown are in any way blocked or partially blocked as a result of any road construction or other improvements LESSOR agrees to reduce LESSEE'S obligations during such period of construction or improvement to the sum equal to the monthly amortization payment on the original mortgage financing for the improvements constructed pursuant to this Lease plus the monthly land rental paid by LESSOR pursuant to their Lease with John Boman, Executor of the Estate of Henry C. Boman. 11. DAMAGE TO OR DESTRUCTION OF PREMISES: If the building or other improvements located on the demised premises should be damaged or destroyed by fire or other casualty, LESSEE will promptly notify LESSOR of such casualty. If such casualty is insured against, LESSOR will, to the extent of the net proceeds of insurance available, repair and restore the buildings and improvements so damaged or destroyed as nearly as may be to their condition immediately prior to such casualty. In the meantime, if the demised premises should be rendered partially or totally untenantable, there will be an equitable abatement of the rent mentioned in paragraph 4 until the premises are again rendered ten- antable; provided, however, that said period of abatement shall not exceed forty-five (45) days; provided, further, that LESSEE shall not be relieved during said period of untenantability from its obligation to pay taxes and other charges and to keep the premises insured as provided in paragraphs 4(B)(3) and 6(C) hereof. In case of damage or destruction occurring in the last three (3) years of this Lease, or any extension or renewal thereof, to the extent of fifty percent (50%) or more of the insurable value of the building, LESSOR and/or LESSEE may, at its option, in lieu of repairing or replacing the same, elect to terminate this Lease as of the date of said damage or destruction, and in such event, LESSOR shall be entitled to receive the proceeds derived from any insurance applicable to the building. In the event of such termination, LESSOR shall refund to LESSEE any unearned rents paid in advance of such termination date. 12. REPAIRS AND ALTERATION: LESSEE shall maintain the premises in good structural condition and repair, shall make all structural repairs and replacements necessitated by any cause other than LESSOR'S negligence, and shall make all repairs or replacements necessitated by any peril covered by a Standard Fire and Extended Coverage insurance policy to the extent of the proceeds received from such insurance policy, whether or not caused by LESSOR'S negligence. LESSEE or any sub-lessee may make alterations, additions and improvements to the demised premises from time to time during the term of this Lease, with the consent of LESSOR and shall have the right to erect and install such other or additional improvements, signs and equipment on the demised premises as LESSEE may, in its sole judgment, deem desirable for conducting its business thereon or for such other business as LESSEE may deem advisable. LESSEE shall have no authority to create or place any lien or encumbrance of any kind whatsoever upon or in any manner to bind the interest of LESSOR in the demised premises, and LESSEE covenants and agrees promptly to pay all sums legally due and payable by it on account of any labor performed by it on the demised premises upon which any lien is or can be asserted against the demised premises or the improvements thereon. 13. LESSOR DEFAULT: Should LESSOR default in the performance of any covenant required to be performed by LESSOR, LESSEE may serve upon LESSOR a notice specifying the default and requiring performance by the LESSOR within a period of time set forth in such notice, which shall not be less than thirty (30) days after receipt of said written notice. In the event that LESSOR shall not have remedied the default within the time set forth in the notice, LESSEE may consider this Lease terminated, unearned rent shall be prorated to the date of termination and LESSEE shall have no further liability. In the event of such default by LESSOR after notice shall have been given as aforesaid, in lieu of termination of this Lease LESSEE, at its sole option, may cure LESSOR'S default and offset the reasonable expense thereof against rent thereafter accruing. However, if any default shall occur which cannot, with due diligence, be cured within a period of thirty (30) days, and LESSOR, prior to the expiration of thirty (30) days from and after the giving of notice as aforesaid, commences to eliminate the causes of such default and proceeds diligently and with reasonable dispatch to take all steps and to do all work required to cure such default, then LESSEE shall not have the right to declare the said term ended by reason of such default. 14. LESSEE DEFAULT: If LESSEE shall fail to pay any installment of rent promptly on the day the same shall become due and payable hereunder, and shall continue in such default for a period of thirty (30) days after receipt of written notice thereof by LESSOR, or if LESSEE shall fail to promptly keep and perform any other affirmative covenant of this Lease, strictly in accordance with the terms of this Lease and shall continue in default for a period of thirty (30) days after receipt of written notice thereof by LESSOR of default and demand of performance, then and in any such event and as often as any such event shall occur, LESSOR may (a) declare the said term ended, and enter into said demised premises or any part thereof, either with or without process of law, and expel LESSEE or any person occupying the same in or upon said premises, using such force as may be necessary, and to repossess and enjoy said premises as in LESSOR'S former estate; or (b) relet the premises, applying said rent from the new tenant on this Lease, and LESSEE shall be responsible for no more than the balance that may be due, should a balance exist. However, if any default shall occur, other than in the payment of money, which cannot with due diligence be cured within a period of thirty (30) days, and LESSEE, prior to the expiration of thirty (30) days from and after the giving of notice as aforesaid, commences to eliminate the cause of such default and proceeds diligently and with reasonable dispatch to take all steps and do all work required to cure such default, then LESSOR shall not have the right to declare the said term ended by reason of such default. 15. SUBORDINATION AND NON-DISTURBANCE: The Lease shall be subject and subordinate to the lien of any mortgage which LESSOR may place upon the premises to finance the cost of construction of the improvements and to all terms, conditions and provisions thereof to all advances made, and to any renewal, extensions, modifications or replacement thereof. Provided, however, that if the Lease is in full force and effect and there are no defaults, thereunder on the part of the LESSEE, the right of possession of LESSEE to the leased premises and LESSEE'S rights arising out of this Lease shall not be affected or disturbed by the mortgagee in the exercise of any of its rights under the mortgage or the note secured hereby, nor shall LESSEE be named as a party defendant to any foreclosure of the lien or mortgage, nor in any other way be deprived of its rights under this Lease. In the event that the mortgagee or any other person acquired title to the premises pursuant to the exercise of any remedy provided for in the mortgage, this Lease shall not be terminated or affected by said foreclosure or sale or any such proceeding, and the mortgagee shall agree that any sale of the premises pursuant to the exercise of any rights and remedies under the mortgage, or otherwise, shall be made subject to this Lease and the rights of the LESSEE hereunder. LESSEE agrees to attorn to the mortgagee or such person as its new LESSOR and the Lease shall continue in full force and effect as a direct lease between LESSEE and mortgagee or such other person upon all the terms, covenants and agreements set forth in the Lease The parties hereto agree to execute such reasonable documents as may be necessary to effectuate said subordination. 16. MISCELLANEOUS PROVISIONS: A) Notices, Demands and Other Instruments. All notices, demands, requests, consents, approvals and other instruments required or permitted to be given pursuant to the terms hereof shall be in writing and shall be deemed to have been properly given if sent by registered or certified mail, postage prepaid, or telegram, charges prepaid, addressed to the parties herein at the addresses shown on the first page hereof. B) Binding Effect. All of the covenants, conditions and obligations herein contained shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto to the same extent as if each such successor and assign were in each case named as a party to this Lease. This Lease may not be changed, modified or discharged, except by a writing, signed by both LESSOR and LESSEE. C) Separability. Each and every covenant and agreement contained in this Lease shall for all purposes be construed to be a separate and independent covenant and agreement, and the breach of any covenant or agreement contained herein by either party shall in no way or manner discharge or relieve the other party from its obligation to perform each and every covenant and agreement herein. D) Headings and Terms. The headings to the various paragraphs of this Lease have been inserted for convenient reference only and shall not in any manner be construed as modifying, amending or affecting in any way the express terms and provisions hereof. The term "person" when used in this Lease, shall mean any individual, corporation, partnership, firm, trust, joint venture, business association, syndicate, combination organization or any other person or entity. 17. CONSTRUCTION OF LEASE: Words of any gender used in this Lease shall be held to include any other gender, and words in the singular number shall be held to include the plural, when the sense requires. Wherever used herein, the words "LESSOR" and "LESSEE" shall be deemed to include the heirs, personal representatives, successors, sublessees and assigns of said parties, unless the context excludes such construction. WITNESS: Claude H Rogers (Lessor) John A McCallum (Lessor) ATTEST: WENDY'S INTERNATIONAL, INC. By Robert E. Barone Secretary (Lessee) STATE OF OKLAHOMA ) ) SS: COUNTY OF TULSA ) BEFORE ME, a notary public in and for said county and state, personally appeared Claude H. Rogers and Mitch Adwon who acknowledged before me that the foregoing instrument was signed for the purposes therein stated and as the free act and deed of the signers thereof. IN WITNESS WHEREOF, I have hereunto set my hand and official seal at ____________________________, said County and State, this ___th day of _______, A.D., 19___. __________________________ NOTARY PUBLIC My commission expires: STATE OF OHIO ) ) SS: COUNTY OF FRANKLIN ) BEFORE ME, the undersigned authority, personally appeared ________________________ and ______________________________ as Chairman of the Board, President, or Vice-President, and Secretary or Assistant Secretary, respectively, of WENDY'S INTERNATIONAL, INC., an Ohio corporation, and they acknowledged before me that they executed the foregoing Lease for the purposes therein stated and as the act and deed of the corporation, and did affix the corporate seal thereon. IN WITNESS WHEREOF, I have hereunto set my hand and official seal at Columbus, said County and State, this __13__ day of ____________, A.D., 1915. __________________________ NOTARY PUBLIC My commission expires: ELINOR J. THIEL, Notary Public My Commission Expires May 21, 1979 This instrument prepared by Domenic Federico, Attorney at Law 21 East State Street Columbus, Ohio 43215 EXHIBIT "B" ADMIRAL PL 1"=20' 44 SPACES